Flying Against the Winds of Science – Culture versus Strategy
Why Southwest's Culture eats USAIRWAY's Strategy
I’ve been doing considerable research and development of programs for workforce motivation, engagement and the role of incentives and rewards in building a culture of performance. What I have discovered is that incentives and rewards are primitive tools of the 20th century carrot and stick approach to motivating employees performance, and at best they only affect short-term results and come with great risk.
With this in mind I was fascinated to find two articles about separate companies exemplifying and employing the best and worst forms of employee motivation. The first company is one operating in the 21st century but still mired in 20th century beliefs about motivation and utilizing 20th century tools to accomplish its mission. The second has a record of consistent excellence in operating performance and employee and customer satisfaction for more than 20 years, with a focus on building and sustaining a high performing culture by utilizing a proven model of motivation that taps into the intrinsic desires of employees and customers.
My interest was piqued not just because of the content of the articles; I was also interested because I am a customer of both organizations and have a personal understanding of how their approaches to workforce motivation impact my experience. And I can attest that there is a significant difference.
The two companies are USAir Ways (USAir) and Southwest Airlines. I am a frequent customer of USAir – in fact, I just achieved Platinum status in their air miles program – and am an occasional user of Southwest. This is only because USAir provides better routes to my most frequent destinations. Therefore I use them out of convenience, not preference.
On one particular trip I wanted to make an intermediate stop before heading to my final destination. I chose Southwest on this occasion because it had a better schedule at similar rates. The hotel I was staying at provided me a complementary copy of USA Today, which I decided would make good reading on the plane. As I was scanning the headlines, one in particular caught my eye: “US Airways makes progress.” It chronicled how the company found itself ranked low on many indicators of passenger satisfaction, such as baggage handling, and how it recently achieved top ratings compared to other “legacy carriers,” which Southwest is not. The article stated that the company had to dramatically boost performance and one key initiative it instituted to aid in this was an incentive program called Triple Play Bucks, which pays employees when the company achieves top billing in a number of categories. It went on to say that employees have received $350.00 each this year for a total of 13.1 million dollars distributed to employees.
The second article, “Gary’s Greeting,” by Southwest’s CEO Gary Kelly, which appeared in the airline’s Spirit magazine, discussed the importance of corporate culture and how the company has worked diligently to keep it vibrant for more than 20 years. Kelly stated, “Your business plan is what you are, but culture is who you are,” and the article noted the significance of Southwest’s Culture Committee, which consists of employees from each major work location meeting quarterly to share ideas on how to keep their culture vibrant, meaningful and strong. The article highlighted the three qualities that define their culture: “A Warrior Spirit,” “A Servant’s Heart” and “A FunLUVing Attitude.”
A statement from Southwest’s investor relations web page notes, “Southwest is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People and Planet.” One could be skeptical and say this is a heap of self-promotion. However, Southwest was honored by receiving an Employees’ Choice Award as one of the top 50 best places to work in 2012 – an award 150,000 companies competed for, all rated and ranked by their employees. Southwest came in 17th and the competition included companies such Google, Facebook, Nike, and Starbucks. No other airline was ranked in the top 50. Both airlines have accomplished a lot, however it appears USAir is still trapped in 20th century thinking and strategy about motivation. I am making this assertion because of the use of the Triple Pay Bucks, which is a purely extrinsic, carrot and stick tool to buy performance. This ploy is fraught with risks and is difficult to sustain. When will employees begin to complain that $350.00 isn’t enough to behave in a manner that endears customers? Will USAir be willing to up the ante if necessary? What if oil spikes because of a world crisis and the company feels the need to cut costs? These are a few of the pitfalls for pay-for-performance schemes. I have had firsthand experience working with a company that compensated employees to serve on a committee to provide an important internal service in the organization, and when the organization made a decision to reduce compensation they lost members and now cannot recruit new ones. There is another factor to consider that is identified in numerous employee engagement surveys: employees who work hard eventually come to resent co-workers and the company as a whole when slackers receive the same rewards. What is most troublesome about USAir’s strategy is that since the 1970s this type of extrinsic motivation program has been proven to be a failure. One of the pioneers in researching human and organizational motivation is Edward Deci, Ph.D Professor of Psychology at the University of Rochester. In this quote from his book Why We Do What We Do, he succinctly articulates the core issue: “When people say that money motivates, what they really mean is that money controls. And when it does, people become alienated – they give up some of their authenticity –and they push themselves to do what they think they must do. One take on the meaning of alienation is that it begins as people lose touch with their intrinsic motivation, with the vitality and excitement that all children have.” Daniel Pink, in his book Drive, states, “The problem is that most businesses haven’t caught up to this understanding of what motivates us. Too many organizations – not just companies, but governments and non-profits as well – still operate from assumptions about human potential and individual performance that are outdated, unexamined, and rooted more in folklore than science. They continue to pursue practices such as short-term incentive plans and pay-for-performance schemes in the face of mounting evidence that such measure usually don’t work and often do harm.”
As many companies do, USAir took the easy way to achieve a strategy, possibly not realizing or caring about building a positive, high-performing company culture for the long term. A familiar quote goes, “Culture eats strategy for lunch,” to which I can’t help but add, “There are no free lunches.” The opportunity to build a service culture may have been lost for USAir; surely they’ve lost the opportunity to ignite the intrinsic motivation waiting to be released in their employees.
It is also important to note that for some employees, programs like Triple Pay Bucks can be perceived as an insult, because it insinuates a lack of respect, concern and personal pride that they take in their job – something that management assumes they can stimulate with the metaphorical dangling carrot.
Alternately, I must share one example of how I experienced Southwest’s spirited, heartened and fun-loving culture. On a 45-minute flight (air time), Southwest’s flight attendants started to take drink orders as the flight was taxiing. Once the plane reached a safe altitude they put a drink and a bag of peanuts in every passenger’s hand and did so with a smile. On a recent USAir flight of the same duration, as well as same route, a flight attendant announced after takeoff that there would be no beverage service because of the short duration. That is the absence of any kind of spirit and no amount of Triple Pay Bucks will instill it.
I will continue to fly USAir because it is convenient. I don’t have high expectations; therefore I only occasionally get upset at the absence of service and caring. I look forward to opportunities when I can fly Southwest and experience what it is like to be a customer taken care of by genuinely happy, motivated employees.
The Renewal Group has developed programs to assist companies in developing high-performance cultures by awakening, inspiring and empowering intrinsic motivation and human potential. Our Partners in Safety Program demonstrates how companies by utilizing intrinsic motivation concepts and tools can build high-performing safety cultures within their organizations and The Edge Program provides leaders and managers with the concepts and tools to unleash intrinsic motivation in their employees and our Relationship - Centered Leadership program assists leaders in developing the Seven Hallmarks of Leadership that build their power to inspire and influence employee engagement.
Postscript: On a later flight on USAir I met a flight attendant who makes a difference not because of triple bucks, but because he is intrinsically motivated. I'll share this story on a blog soon to be posted
Why Southwest's Culture eats USAIRWAY's Strategy
I’ve been doing considerable research and development of programs for workforce motivation, engagement and the role of incentives and rewards in building a culture of performance. What I have discovered is that incentives and rewards are primitive tools of the 20th century carrot and stick approach to motivating employees performance, and at best they only affect short-term results and come with great risk.
With this in mind I was fascinated to find two articles about separate companies exemplifying and employing the best and worst forms of employee motivation. The first company is one operating in the 21st century but still mired in 20th century beliefs about motivation and utilizing 20th century tools to accomplish its mission. The second has a record of consistent excellence in operating performance and employee and customer satisfaction for more than 20 years, with a focus on building and sustaining a high performing culture by utilizing a proven model of motivation that taps into the intrinsic desires of employees and customers.
My interest was piqued not just because of the content of the articles; I was also interested because I am a customer of both organizations and have a personal understanding of how their approaches to workforce motivation impact my experience. And I can attest that there is a significant difference.
The two companies are USAir Ways (USAir) and Southwest Airlines. I am a frequent customer of USAir – in fact, I just achieved Platinum status in their air miles program – and am an occasional user of Southwest. This is only because USAir provides better routes to my most frequent destinations. Therefore I use them out of convenience, not preference.
On one particular trip I wanted to make an intermediate stop before heading to my final destination. I chose Southwest on this occasion because it had a better schedule at similar rates. The hotel I was staying at provided me a complementary copy of USA Today, which I decided would make good reading on the plane. As I was scanning the headlines, one in particular caught my eye: “US Airways makes progress.” It chronicled how the company found itself ranked low on many indicators of passenger satisfaction, such as baggage handling, and how it recently achieved top ratings compared to other “legacy carriers,” which Southwest is not. The article stated that the company had to dramatically boost performance and one key initiative it instituted to aid in this was an incentive program called Triple Play Bucks, which pays employees when the company achieves top billing in a number of categories. It went on to say that employees have received $350.00 each this year for a total of 13.1 million dollars distributed to employees.
The second article, “Gary’s Greeting,” by Southwest’s CEO Gary Kelly, which appeared in the airline’s Spirit magazine, discussed the importance of corporate culture and how the company has worked diligently to keep it vibrant for more than 20 years. Kelly stated, “Your business plan is what you are, but culture is who you are,” and the article noted the significance of Southwest’s Culture Committee, which consists of employees from each major work location meeting quarterly to share ideas on how to keep their culture vibrant, meaningful and strong. The article highlighted the three qualities that define their culture: “A Warrior Spirit,” “A Servant’s Heart” and “A FunLUVing Attitude.”
A statement from Southwest’s investor relations web page notes, “Southwest is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People and Planet.” One could be skeptical and say this is a heap of self-promotion. However, Southwest was honored by receiving an Employees’ Choice Award as one of the top 50 best places to work in 2012 – an award 150,000 companies competed for, all rated and ranked by their employees. Southwest came in 17th and the competition included companies such Google, Facebook, Nike, and Starbucks. No other airline was ranked in the top 50. Both airlines have accomplished a lot, however it appears USAir is still trapped in 20th century thinking and strategy about motivation. I am making this assertion because of the use of the Triple Pay Bucks, which is a purely extrinsic, carrot and stick tool to buy performance. This ploy is fraught with risks and is difficult to sustain. When will employees begin to complain that $350.00 isn’t enough to behave in a manner that endears customers? Will USAir be willing to up the ante if necessary? What if oil spikes because of a world crisis and the company feels the need to cut costs? These are a few of the pitfalls for pay-for-performance schemes. I have had firsthand experience working with a company that compensated employees to serve on a committee to provide an important internal service in the organization, and when the organization made a decision to reduce compensation they lost members and now cannot recruit new ones. There is another factor to consider that is identified in numerous employee engagement surveys: employees who work hard eventually come to resent co-workers and the company as a whole when slackers receive the same rewards. What is most troublesome about USAir’s strategy is that since the 1970s this type of extrinsic motivation program has been proven to be a failure. One of the pioneers in researching human and organizational motivation is Edward Deci, Ph.D Professor of Psychology at the University of Rochester. In this quote from his book Why We Do What We Do, he succinctly articulates the core issue: “When people say that money motivates, what they really mean is that money controls. And when it does, people become alienated – they give up some of their authenticity –and they push themselves to do what they think they must do. One take on the meaning of alienation is that it begins as people lose touch with their intrinsic motivation, with the vitality and excitement that all children have.” Daniel Pink, in his book Drive, states, “The problem is that most businesses haven’t caught up to this understanding of what motivates us. Too many organizations – not just companies, but governments and non-profits as well – still operate from assumptions about human potential and individual performance that are outdated, unexamined, and rooted more in folklore than science. They continue to pursue practices such as short-term incentive plans and pay-for-performance schemes in the face of mounting evidence that such measure usually don’t work and often do harm.”
As many companies do, USAir took the easy way to achieve a strategy, possibly not realizing or caring about building a positive, high-performing company culture for the long term. A familiar quote goes, “Culture eats strategy for lunch,” to which I can’t help but add, “There are no free lunches.” The opportunity to build a service culture may have been lost for USAir; surely they’ve lost the opportunity to ignite the intrinsic motivation waiting to be released in their employees.
It is also important to note that for some employees, programs like Triple Pay Bucks can be perceived as an insult, because it insinuates a lack of respect, concern and personal pride that they take in their job – something that management assumes they can stimulate with the metaphorical dangling carrot.
Alternately, I must share one example of how I experienced Southwest’s spirited, heartened and fun-loving culture. On a 45-minute flight (air time), Southwest’s flight attendants started to take drink orders as the flight was taxiing. Once the plane reached a safe altitude they put a drink and a bag of peanuts in every passenger’s hand and did so with a smile. On a recent USAir flight of the same duration, as well as same route, a flight attendant announced after takeoff that there would be no beverage service because of the short duration. That is the absence of any kind of spirit and no amount of Triple Pay Bucks will instill it.
I will continue to fly USAir because it is convenient. I don’t have high expectations; therefore I only occasionally get upset at the absence of service and caring. I look forward to opportunities when I can fly Southwest and experience what it is like to be a customer taken care of by genuinely happy, motivated employees.
The Renewal Group has developed programs to assist companies in developing high-performance cultures by awakening, inspiring and empowering intrinsic motivation and human potential. Our Partners in Safety Program demonstrates how companies by utilizing intrinsic motivation concepts and tools can build high-performing safety cultures within their organizations and The Edge Program provides leaders and managers with the concepts and tools to unleash intrinsic motivation in their employees and our Relationship - Centered Leadership program assists leaders in developing the Seven Hallmarks of Leadership that build their power to inspire and influence employee engagement.
Postscript: On a later flight on USAir I met a flight attendant who makes a difference not because of triple bucks, but because he is intrinsically motivated. I'll share this story on a blog soon to be posted
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